Tokyo court rules in favor of Toshiba in chip patent battle

AP , TOKYO

Toshiba Corp won a patent lawsuit against South Korean rival Hynix Semiconductor Inc in a Tokyo court yesterday over patents for computer chips widely used in cellphones, digital cameras and portable music players.

The Tokyo District Court ruled in favor of the Japanese electronics company, saying that Hynix Semiconductor had infringed on Toshiba's patents related to NAND flash memory.

The court ordered that sales of Hynix products found to be in violation be halted in Japan and ordered Hynix pay Toshiba ?7.8 million (US$67,000) in damages, Toshiba spokesman Makoto Yasuda said.

In Seoul, Hynix, the world's second-largest memory chip maker after Samsung Electronics Co, said yesterday that it will take all possible legal actions against the Tokyo court's ruling.

appeal

Hynix spokeswoman Kim Ah-young said the company plans to appeal.

"The company will take all possible legal measures against the court's ruling," said Bang Min-ho, general manager of Hynix Semiconductor, while declining to elaborate. "The court ruling is only related to one of the three violations of NAND flash memory related patents. And it's just the beginning of the trial."

Toshiba filed the lawsuit in November 2004. At that time, it also filed a lawsuit against Hynix in the US District Court for the Northern District of Texas, seeking unspecified damages, accusing Hynix of violating patents in the US for DRAM, or dynamic random access memory, chips, which are used in personal computers. The US case is still pending, Yasuda said.

Toshiba and Hynix entered a licensing agreement in August 1996 that included semiconductor products, Toshiba said. They began negotiating an extension of the agreement ahead of its expiration in December 2002, but failed to agree on a fee, leading to the lawsuits.

growing competition

Such legal battles underline growing competition in the electronics industry between the established Japanese companies and newer, up-and-coming South Korean makers.

Earlier this year, Japan said it will slap import duties of 27.2 percent on computer memory chips made by Hynix in retaliation for alleged government subsidies. South Korea and Hynix blasted the move.

The tariff is the first Japan has imposed to counter alleged subsidies by a foreign government. It is also the first time for Tokyo to levy such duties on high-technology products.

That dispute began when Japan's Elpida Memory Inc and Micron Japan Ltd, a unit of US chipmaker Micron Technology Inc, filed complaints to the Japanese government in 2004 that their businesses were hurt by alleged South Korean subsidies to Hynix in the form of bailout loans.